By Kari Williamson

Despite recent advances in smart grid developments, much of the heavy lifting still lies ahead as the traditional energy sector, in partnership with new technology providers, must innovate and overhaul outdated business models to deliver true value to consumers and society.

Currently, utility companies around the world are embarking upon projects that will see hundreds of millions of smart meters and other smart grid devices installed in the next decade. However, in a scenario where few new entrants or new products and services emerge to take advantage of smart network investments, benefits to the consumer could be relatively limited, the analyst predicts.

Albert Cheung, Head of Energy Smart Technologies at Bloomberg New Energy Finance, says: “Removing regulatory barriers to innovation and allowing new entrants into the market will help to realise the benefits of smart energy. Even in deregulated markets such as in Europe, innovation can be stifled by outdated regulations and legacy market rules. We believe that smart energy will not only herald a technology update for the power industry; it will also usher in a period of significant business innovation, leading to a very different energy sector than the one that exists today.”

Need investment and partnerships

Gil Forer, Leader of Ernst & Young's Global Cleantech Center, adds: "The implementation of smart grid is one of the key enablers for a wide successful deployment of renewable energy and electric vehicles. But the required investment in smart grid infrastructure requires not only a significant amount of capital but also partnerships among various stakeholders and continuous technology and business model innovation.”

The findings are presented in full in the book from the 2011 Energy Smart Technologies Leadership Forum, published by Bloomberg New Energy Finance in conjunction with partner EDP Distribuição and sponsor Silver Spring Networks.